E-Paper
Chandigarh: No proof liver disease was alcohol induced, insurer told to settle claim
The commission held that the insurer failed to establish that the policyholder’s liver cirrhosis was caused solely by alcohol consumption so as to attract the exclusion clause in the health insurance
Holding that an insurer cannot deny a medical claim merely by attributing a disease to alcohol consumption without credible medical evidence, the district consumer disputes redressal commission-I, Chandigarh, directed Star Health and Allied Insurance Company Ltd. to reimburse ₹6 lakh to the family of a deceased policyholder after finding the claim repudiation to be arbitrary and unjustified.
The commission, comprising president Pawanjit Singh and member Suresh Kumar Sardana, held that the insurer failed to establish that the policyholder’s liver cirrhosis was caused solely by alcohol consumption so as to attract the exclusion clause in the health insurance policy.
According to the complaint, the policyholder, Charanjit Singh, had been covered under a continuously renewed family health insurance policy since July 2020. In March 2022, he was diagnosed with a liver malignancy and later underwent treatment at Post Graduate Institute of Medical Education and Research (PGIMER), Chandigarh, incurring medical expenses of over ₹7 lakh.
The insurer rejected the reimbursement claim in July 2022, citing the policy exclusion relating to alcoholism and its consequences. Singh died of cardiac arrest in November 2022.
The complainant, however, relied on a clarification issued by PGIMER stating that the patient had consumed only 40-60 grams of alcohol per week and that his last alcohol intake had been about seven years before his treatment.
‘Misinterpretation of policy terms an unfair trade practice’
Rejecting the insurer’s defence, the commission observed that cirrhosis can result from several causes, including non-alcoholic fatty liver disease, viral hepatitis, autoimmune liver disease and metabolic disorders, apart from alcohol-related liver disease. It held that the insurer failed to produce any expert opinion, medical literature or independent evidence linking the deceased’s cirrhosis exclusively to alcohol consumption.
“The burden to prove the applicability of an exclusion clause squarely rests upon the insurer,” the commission observed, adding that the exclusion could not be invoked “merely on assumptions or conjectures.” It concluded that the repudiation was based on a misinterpretation of the policy terms and amounted to deficiency in service as well as an unfair trade practice.
While the complainant sought reimbursement of ₹7 lakh, the commission found documentary proof only for expenses amounting to ₹6 lakh and restricted the award accordingly.
The commission directed Star Health to pay ₹6 lakh with 9% annual simple interest from July 28, 2022, the date of claim repudiation, besides ₹10,000 as compensation for mental agony and ₹10,000 towards litigation costs. It further ordered that failure to comply within 45 days would attract 12% penal interest on the compensation and reimbursement amount until payment.
